Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. transfer pricing involves setting a price on goods

Transfer pricing involves setting a price on goods that are transferred between divisions within a single...

50.1K

Verified Solution

Question

Accounting

Transfer pricing involves setting a price on goods that aretransferred between divisions within a single company. Is thispractice necessary? What are the advantages? Disadvantages? What’san appropriate price if it’s going to be done?

Answer & Explanation Solved by verified expert
3.6 Ratings (328 Votes)
Transfer price Transfer price is the price at which divisions of a company transact with each other such as the trade of supplies or labor between departments Transfer prices are used when individual entities of a larger multientity firm are treated and measured as separately run entities A transfer price can also be known as a transfer cost Purposes of Transfer Pricing The transfer pricing method allows the company to generate profit figures for each division in separate manner The sales pricing and the production departments can be coordinated through this method The managers can also get aware of the value of the services and the products in other segments of the firm It helps in generating not only the reported profits of the entire center but also the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

You are concerned that Trump administration tariffs on China’s exports will provoke further retaliatory tariffs, and...

Finance
Q

The number of words defined on pages randomly selected from a dictionary are given below. Find...

Advance Math
Q

Air flows in a pipe with a diameter, D=50 mm. The inlet conditions are: M1 =...

Mechanical Engineering
Q

For a bicycle, the nominal diameter of the outer race of a ball bearing and the...

Mechanical Engineering
Q

Scenario 1 - Ethical Dilemma - Reclassify Employees You are on the management team of Crystal Clear...

Accounting
Q

Question 3 In A RST what is x A B UD 3 it is not...

Geometry
Q

Using the data presented below: Square Corp. ...

Accounting
Q

Management of The Mars Company has determined that its manufacturing overhead costs should be allocated...

Accounting
Q

The Wisco Company has a process cost system. All materials are added when the process...

Accounting
Q

P9-57A (similar to) Derry Manufacturing is preparing its master budget for the first quarter of...

Accounting
Q

Pure Water Products produces two types of water filters. One attaches to the faucet and...

Accounting
Q

MM with Corporate Taxes Firms U and I are identical in every respect. The information...

Finance